6 Tips to Get Ready for Buying a Home this Season

Published 8:00 pm, Wednesday, February 17, 2016

(StatePoint) Buyer-friendly 30-year fixed mortgage rates and an improving job market are good news for spring homebuyers this season.

Yet, even with these favorable conditions, many home purchase contracts will get held up at closing by financial issues. This doesn't have to be the case. There are several things you can do before and after submitting a contract to help make sure you walk away from the closing table with the keys to your new home in hand.

Freddie Mac Senior Vice President Christina Boyle recommends doing the following before seriously hunting for a home this spring:

• Learn your current credit history and score. You don't want any surprises down the road. If you have no credit history, or have had credit problems in the past, you can take steps to build, improve, and maintain strong credit. Contact a HUD-approved housing counselor for free advice.

• Understand your options. Don’t assume you won’t have enough for a down payment or won’t qualify for a mortgage without 20 percent down. In fact, about 40 percent of today`s homebuyers are making down payments of less than 10 percent, according to research from Zelman & Associates. And new products, like the Freddie Mac Home Possible Advantage mortgage, offer down payment options as low as three percent for qualified borrowers.

After signing a purchase contract but before closing, Boyle recommends doing the following:

• Don't take on more debt or make large cash purchases. Resist the temptation to take out new loans or open new credit cards. This could affect your credit profile and may require the lender to resubmit your mortgage application to verify you still qualify. Also, substantial cash purchases may make your mortgage company question whether you can really afford monthly payments.

• Meet your lender's deadlines. Heed deadlines for providing documentation or information. A missed deadline could delay the closing, which may require you either to pay more to extend the mortgage terms you locked in when you submitted the application or, in the worst case, reapply for the mortgage.

Buying a home can be intimidating without knowledge. For more tips and resources on buying a home, visit the consumer education site, My Home by Freddie Mac, at MyHome.FreddieMac.com.

With preparation, you can help ensure your homebuying process goes off without a hitch.